GListen plc

("Glisten" or "the Group")

 (AIM:GLI),

 the fast-growing confectionery and snack foods group

Preliminary Results for the year ended 30 June 2009

Highlights

Commenting on the results, Paul Simmonds, Chief Executive of Glisten plc, said: 

"Although our results for the year are below our original forecasts, our confidence, optimism and determination to continue to make Glisten one of the very best young food businesses in its sector remain undimmed. 

We have made good progress again this year and, although this was overshadowed by shortcomings in the fourth quarter in Halo Foods, this has been quickly corrected. We are very pleased with progress since then and we feel that the prospects for the business are excellent

We have had a good start to the new financial year with like-for-like sales ahead 13% at £25.0m after 17 weeks of the year. Group margins are in line with forecasts and all parts of our business are in growth and profitable.

Halo Foods has started the year well with a profitable first quarter and growth ahead of the Group average."

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   Background note 

Glisten plc is an ambitious impulse food-group operating at the leading edge of health, nutrition, and premium snacking. It serves a wide variety of customers including most high street retailers, many major food manufacturers and the foodservice sector. Glisten also exports to more than 20 countries worldwide.

The principal activities of Glisten are the manufacture of cereal, fruit snack bars and health bars, many of which have a diet-control or sports/energy dimension. Glisten is a leader in organic and natural snacks and premium confectionery.

Glisten also manufactures specialised coatings which it markets to the broader food industry, particularly Europe's largest ice-cream and bakery manufacturers.

Glisten's brands include: 'Fruitus', produced by Lyme Regis Foods, Dormen and 'SunMaid', where Glisten has the Europe-wide confectionery and fruit-snacking rights.

In September 2007, the Group acquired 50% of Skinny Candy, a young branded confectionery business focused on low sugar-low fat confectionery, and Dormen Foods, which became the foundation stone of the Savoury Snacking Division. This was followed in November 2007 by the acquisition of Big Thoughts Ltd, comprising two subsidiaries active in the low fat/baked savoury snacking marketplace - 'Snacks Unlimited' and 'The Lindum Snack Company Limited'.

In addition to these areas Glisten has well established integrated relationships with some of Europe's biggest brand-name food companies where it produces snacking products under license.

It listed on the AIM market of the London Stock Exchange in June 2002 with sales of £14.3m. Group turnover for the year ended 30 June 2009 was £74.4m.

The Company now employs approximately 650 people across its manufacturing sites around the UK. Some of Glisten's sites are nut-free and have organic-food accreditation.

Head Office and Group Companies

The Head Office is in Harewood, near Leeds, Yorkshire. The Group's operations are set out below

Confectionery Division ('GCD')

GListen plc

("Glisten" or "the Group")

(AIM:GLI),

The snack foods and confectionery group

Preliminary Results for the year ended 30 June 2009

CHAIRMAN'S STATEMENT

This is our seventh year as an AIM listed company and whilst this year has seen good progress in parts of the Group, overall our performance has been below expectations. Some of the highlights are as follows:-

• Excellent performances from Lyme Regis, Nimbus and Savoury Snacks 

• Continued strong operating cash generation and improving operational efficiency

• Dormen and Snacks Unlimited now integrated under one management team 

• Strengthening of our senior management team with one key appointment

Results

During the year to 30 June 2009, Glisten Plc achieved revenue up 1% to £74.4m (2008: £73.8m).  EBITDA before exceptional items fell by 28% to £7.1m (2008: £9.9m) and our pre exceptional operating profits (see note 3) were down by 36% to £5.1m (2008: £8.0m). Profit before tax and exceptional items decreased by 49% to £3.4m (2008: £6.7m).  

Our adjusted basic earnings (as defined in note 7) and adjusted diluted earnings per share fell by 49% to 17.9p (2008: 35.2p) and 17.5p (2008: 34.1p) respectively. 

Dividend

As a result of the lower than expected profit performance this year and the decision to reduce our borrowings over the medium term the Board has decided not to pay a dividend for the year ended 30 June 2009 (2008: 2.25 pence per ordinary share).

Halo Foods

The revelation in June that Halo Foods had been understating its costs by material amounts was an unwelcome event in an already challenging year. More details of the issues are found in the Chief Executive's Review. However, since June an independent review of accounting and reporting processes has reassured us that this was an isolated incident. Nevertheless as a consequence we have reviewed and adjusted where appropriate our internal control procedures across the Group to reduce the likelihood of it ever happening again, and begun quickly the process of rebuilding profitability with almost immediate effect. 

Banking

The reported reduction in profits for the year to 30 June 2009 has resulted in the need for us to renegotiate our banking facilities and delay our preliminary results announcement. These negotiations have now been concluded, the details of which are covered in the Finance Director's Report. The executive team has negotiated hard in a difficult financial climate to bring about the amended banking terms but, with an amended 3 year facility agreement due to be in place in the near future, they can now return to its main priority to develop the Group. Sentiment has changed markedly in relation to what borrowing levels are appropriate but, despite this, it is clear that we have strong support from our bankers.

Management and Board

After 7 years as Chairman of Glisten I am stepping down from the Board at the AGM in December 2009. The process of choosing my successor has been managed by Angela Megson who chairs our Remuneration Committee and we will be announcing my successor once details of the appointment have been finalised. The Glisten business has grown considerably since Paul Simmonds, Rob Davies and I floated the company in June 2002 and today produces an exciting range of tasty, whilst healthy, snacks. I will be leaving the business in good hands. 

Shareholders 

Despite the significant recovery since March 2009 in many stock markets around the world this has still been a difficult year for shareholders as the banking crisis and recession have hit confidence across the world. This has been particularly visible on AIM where our share price has fallen nearly 75% during the year. Our decision to preserve cash and not pay a dividend this year will have added to the pain experienced by our shareholders. However, the underlying business at Glisten is in good shape, healthy snacking has not declined and inflationary pressures generally seem to have abated. The timing is therefore right for the challenge of rebuilding confidence in Glisten as a strong generator of cash, which it has consistently demonstrated in the past. 

Staff

When times are difficult more is asked of all of us and this has been very much the case at Glisten this year. On behalf of the Board I should like to thank all of our staff for their resilience, hard work and enthusiasm throughout the year.

Outlook

We are planning for growth in the year ahead and the first 17 weeks of the current year have started with like for like sales ahead 13%. Although this level of sales growth is unlikely to be sustained for the full year we are optimistic about growing our profitability this year.

Jeremy Hamer

Chairman

CHIEF EXECUTIVE'S REVIEW

Review of the Period

Overview

This has been a challenging year for our business. However, prior to the issues detailed below which were uncovered in Halo Foods late in the fourth quarter, we had considered that Glisten was performing reasonably well in the context of difficult market conditions typified by low consumer confidence and 'trading-down'.

Some of our business units delivered excellent trading performance again this year but sadly this was overshadowed by the issues which arose within Halo. This report - much delayed by the financing negotiations which followed the year end - demonstrates that there is considerable strength and momentum within the business.

In January, we acknowledged lower than forecast first-half sales and downgraded our profit expectations for the first time ever and in mid-June we identified accounting errors which masked under-delivery of profits in Halo Foods, one of our biggest operating units. This under-delivery, together with our actions since then are detailed in this report.

Although our results for the year are below the levels we had originally planned, our confidence, optimism and determination to ensure that Glisten remains one of the very best young food businesses in its sector, remain undimmed.

Sales in the twelve months to 30 June 2009 were £74.4m (2008: £73.8m), up 1%. This is a record sales level despite being behind our original expectations. Operating profits before exceptional items were down by approximately one-third to £5.1m (2008: £8.0m). Profits before tax and exceptional were £3.4m (2008 £6.7m).

All of our business units including Halo Foods were profitable and despite weakened headline numbers there have been some excellent performances within our Group which deserve mention:-

• Nimbus Foods, Lyme Regis Foods and Snacks Unlimited each equalled or achieved record levels of both sales and operating profits 

• Dormen reached its highest brand share within the snacking-nut market consolidating its position as Number two in the sector, and we were even able to recover strong foreign exchange-driven cost surges in some of our key raw materials, particularly pistachio nuts.

• Underlying sales growth in Halo Foods was £5.5m, which represents an increase of 25% year-on-year. Most of this new business commenced in the second half of the year filling the gap following the resignation of a non-profitable contract in June 2008.

• All our main manufacturing sites achieved British Retail Consortium (BRC) Higher Grade accreditation for their technical competence. As this new standard is higher than ever before this is a testament to our food-technology teams around the Group. 

• Real progress was made throughout the year on working capital and cash management. As a result of a Group-wide focus, our net working capital requirement reduced by £1.0m (2008: outflow of £0.9m). This included tightly controlled stock levels and an excellent debtor/creditor performance.

• Net debt finished the year broadly level at £25.2m (2008: £25.1m) despite paying £3.25m deferred consideration in October 2008. This is despite lower than forecast sales revenues and once again demonstrates the strong cash generative qualities of our business.

• International sales grew by 6% during the year to £8.8m, which represents circa12% of Group sales.

Halo Foods Issues 

Halo is part of FCSD (Fruit, Nutritional and Cereal Snacking Division). It was acquired by Glisten in December 2004 and we regard it as one of our best businesses. It has a good reputation and is a clear leader in its marketplace, producing high quality, high-technology, 'healthier' snack bars. It operates in dynamic market segments where product-development is extremely important. As a result, Halo can develop and launch more than 30 new product lines a year, many of which go into the health, diet, sports or nutrition sectors. It has performed consistently well since it became part of the Glisten Group.

Halo's plan this year involved a higher than average level of 'newness', partly as a result of exiting a significant contract-manufacturing relationship in 2008. Our plan centred on new products within a range of important new customers and the launch of our own price-fighting range under the 'Snax' brand. 

In the event, core sales in the first half were weaker than planned and new business began to be concentrated into the final four months of the year. However, in the fourth-quarter, as supply was not adequately planned and operating costs were not adequately controlled the level of demand exceeded Halo's ability to supply cost-effectively. A failure to account correctly for these forced operational inefficiencies together with incorrect accounting for some specific running cost items masked poor profit delivery during this period.

Following discovery of these issues Group management immediately took the following steps:-

• The leadership and finance management within Halo Foods was replaced from within the Group.

• Ernst & Young was commissioned to conduct a detailed independent forensic investigation.

The results of the Ernst & Young review are summarised throughout this Report. I am pleased to advise that all of the main causal factors behind Halo's Q4 issues were seen as isolated, one-off instances that were resolved efficiently and effectively. In addition the external audit of the Group has been concluded and an unqualified report issued. The auditors have reported to the Audit Committee that there were no significant control issues identified throughout the Group.

Significant progress has been made since the end of June and the Halo team under new leadership, have responded well to a dramatically changed short term business agenda which has focused on returning a good business to its previous healthy position. 

This has resulted in improved operations planning and the elimination of premium working, a re-focusing of new product development activity, and a steady return to better customer service. 

As a result I am pleased to advise that Halo was profitable and on-target in July, August and September and although there is more change to implement, we are confident that it is now heading back in the right direction.

	2008/09		2007/08
	Ebit*	Sales	Ebit*	Sales
Confectionery (“GCD”)	£30.3m	£2.3m	£32.8m	£2.8m
Fruit/Cereal Snacks (“FCSD”)	£28.2m	£2.1m	£29.4m	£4.1m
Savoury Snacks (“SSD”)	£16.2m	£1.9m	£11.8m	£2.3m
Head Office /PLC	(£0.3m)	(£1.2m)	(£0.2m)	(£1.2m)
Total Glisten Group	£74.4m	£5.1m	£73.8m	£8.0m

Divisional Performance Review

Whilst Glisten Plc comprises three distinct market-facing Operating Divisions there is considerable interplay on selected initiatives across the Group, particularly in the areas of customer penetration, buying, marketing and supply chain.  

The following commentary details progress in each of our trading divisions:- 

Confectionery Division ("GCD")

This Division comprises our activities at 3 sites - Blackburn and Skegness (trading as Glisten Confectionery) and Dolgellau (trading as Nimbus Foods). The 'consumer confectionery' operation is involved in the manufacture of a wide variety of chocolate and yoghurt coated fruits and nuts, toffees, fudges, and high-fruit gums/jellies.

Nimbus operates in the 'industrial confectionery' market developing sophisticated coated inclusions for customers in the ice cream, bakery and dessert industries. 

Divisional sales were £30.3m (2008: £32.8m). Operating profits reduced to £2.3m (2008 £2.8m). 

This reduced profit performance in consumer confectionery resulted from;- 

• Removal of an underperforming supply agreement with a major retailer. Low margin sales were resigned early in the year and costs were removed from the business on a phased basis but there was a lag effect which reduced profits.

• Recessionary pressure on the smaller/independent retailers and distributors where GCD has always had good penetration caused this trade sector to decline. 

• Increased promotional activity and sustained price reductions from the major confectionery brands reduced the market share of own label confectionery where GC plays a part. 

These downward pressures were somewhat mitigated by a very good performance in the industrial confectionery inclusions market where Nimbus Foods achieved record performance, principally driven by exports of new products to continental Europe and new breakthroughs in the UK desserts marketplace. 

Within consumer confectionery 2009 saw a marked shift in our business away from chocolate in favour of sugar-based confectionery where sales of our natural fruit gums/jellies and toffees grew strongly. 

Fruit and Cereal Snacks Division

This Division comprises our activities at 3 sites - Liphook, Hampshire (trading as Lyme Regis Foods), and two sites in Wales (Tywyn, Gwynedd and Newport, Gwent) - both Trading as Halo Foods Ltd. 

Lyme Regis' focus is on organic, all natural cereal and fruit bars many of which are sold under one of our drive-brands, 'Fruitus', and also high-tech protein/energy bars sold principally in continental Europe in gyms, body-building and other fitness outlets.

Overall Divisional sales were £28.2m (2008: £29,4m) slightly down versus the prior year. Operating profits reduced to £2.1m (2008: £4.1m) due entirely to Halo Foods year-on- year performance.

Lyme Regis Foods had an excellent year. Following a reduction in sales of protein bars through our European partner in 2007/8, we developed a new range of sports/energy snack bars and these were launched in December 2008. Sales in this market sector have increased by 30% year-on year as a direct result of this initiative. As the sports/energy-food market continues its development we continue to believe that there is an increased opportunity for us in the UK with this kind of specialised product. 

Despite the recession, sales of organic snack products including Fruitus increased by 18%. The Fruitus brand itself grew 9% year-on-year due to new listings and product innovation including the launch of Fruitus Chunky, the only fruit bar in the market made up of individual chunks, and the continued growth of key flavour-ways such as Fruitus Pomegranate and Blueberry. The Fruitus brand remains a key platform for the Group in the premium/healthy snacking sector and we have a very strong product development programme ready for implementation in 2010.

Halo Foods' journey is well-documented, but it is worth noting that 2008/09 was our strongest year for organic sales growth with more than £4m of new sales generated in new customers. Glisten has benefited from significant and continuing growth in the discount retail sector where Halo in particular established a number of major new relationships based mainly on product quality and product innovation capability. 

Market growth in pure 'cereal bars' slowed to 5% in 2009 but despite the recession there remains an increasing consumer focus on alternative natural snacks with a health, dietary, functional or nutritional dimension. 

Our job is to make sure that these 'better-for-you' products are as natural, delicious and affordable as we possibly can, particularly in light of the continuing consumer focus on price.

Savoury Snacks Division ("SSD")

SSD was formed in autumn 2007 when we acquired both Dormen Foods and Snacks Unlimited (and its small sister company, Lindum Foods). 

Dormen is based in Swindon and is the UK's leading speciality nuts brand with strong distribution in most of the leading retailers, virtually every garage forecourt and delicatessen in the UK, and most leading hotel groups.

Snacks Unlimited is based in Park Royal, London and produces lower-fat, lower-calorie baked snacks, many of which are sold under the Weight Watchers brand which Glisten is licensed to use.

This Division had an excellent year with sales at record levels and strong margins. Sales were £16.2m (2008: £11.8m) and operating profits were £1.9m, slightly down from 2008 (£2.3m) due to an increase in overheads as the new management team overlapped with departing vendors, higher promotional spend, and higher raw material costs mainly currency related.

Our position in this part of the savoury snacking market is exciting and expandable and our products are high quality and positioned as premium. Early in the year, we saw the beginnings of downward pressure on price and a slowing in hotel demand. However we held our rate of sale and increased distribution within the travel sector (mainly airlines and trains), and in the major multiples with Dormen listed in Morrisons for the first time.

Our low calorie/low fat snacks range was enhanced by the addition of 'Baked Crinkle Crisps' and 'Curls' sold under the WeightWatchers brand. Sales of WeightWatchers products grew by 24% year on year. 

This is a part of the market which is dominated by big brands and where promotional activity and price-discounting have increased markedly over the last 12 months. Our promotional spend in this area increased accordingly during the year and we expect to continue this level of commitment in the year ahead.

The Groups biggest capital spend project this year was dedicated to doubling capacity by moving onto a new site with new forming, frying and baking equipment at the Snacks Unlimited base at Park Royal The project commenced in October 2008 and was completed and commissioned in January 2009 at a capital cost of £763,000. This has enabled us to bring out-sourced manufacturing in-house with improved margin and product quality. Given the growth in the business, this facility has been an excellent investment and is a springboard for future expansion in the UK and abroad.

People

This has been a very demanding year for our people. We take huge pride in what we do and after six years of unbroken growth we are not used to missing our targets. We are very clear about where we want to be and how hard it is to maintain a market-leading level of performance. 

Overall we made good progress again this year and although this was overshadowed by shortcomings in the fourth quarter in Halo Foods, this has been quickly corrected. We are very pleased with progress since then and we feel that the prospects for the business are excellent. My thanks go to our people throughout the business for their effort, commitment and skill.

Market and Outlook

We have had a good start to the new financial year with like-for-like sales ahead 13% at £25.0m after 17 weeks of the year. Group margins are in line with forecasts and all parts of our business are in growth and profitable.

Halo Foods has started the year well with a profitable first quarter and growth ahead of the Group average.

We expect the year ahead to continue to be challenging for all food businesses but there are signs of more stability and consumer confidence. Deep-cut pricing promotions remain the main weapon of the big brands and they are setting the tone in the consumer marketplace. Glisten will need to respond carefully and focus on having lower real costs and more flexibility in both marketing and manufacturing. We are however confident of a much improved performance this year.  

Paul Simmonds

Chief Executive

FINANCE DIRECTOR'S REPORT

Results

Our results for the year ended 30 June 2009 are below expectations with profit before tax and exceptional costs, adjusted earnings per share, operating cash and dividends per share behind last year. 

Net finance costs during the year, pre exceptional items (note 3), were £1,747,000 (2008: £1,331,000) reflecting the full year impact of last year's acquisitions. Interest was covered on a pre exceptional basis 3.0 times (2008: 6.0 times). Interest costs in 2008 were assisted by a foreign currency denominated interest rate swap which reduced the interest charge in that year by £347,000. 

Earnings per Share 

The IAS 33 basic earnings per share in the year as per note 7 was (4.8p loss) (2008: 27.7p), whilst diluted earnings per share was (4.7p loss) (2008: 26.9p). 

The adjusted basic earnings per share fell to 17.9p (2008: 35.2p) and the adjusted diluted earnings per share reduced to 17.5p (2008: 34.1p). The adjusted earnings per share after share based payment decreased to 19.3p (2008: 32.7p) and on a diluted basis to 18.8p (2008: 31.7p). 

Taxation

The effective rate of taxation in the year on profit after exceptional costs is a recovery of 9.5% (2008 recovery: 42.9%). The deferred taxation liability carried forward at the 30 June 2009 was an amount of £70,000 (2008: £877,000). 

Halo Foods

During June 2009 an internal audit was initiated to ensure that all liabilities and costs had been properly accounted for and that the management accounts and forecasts of the business gave the correct view of the profit for the year. This review concluded that Halo's profits and forecast for the year were overstated. Against the forecast operating profit for the business for 2009 this necessitated an adjustment of £2.2m of which £1.6m related to the understatement of costs incurred up until June 2009 and the balance to lower sales and higher previously un-forecast material and other costs during May and June 2009. 

In order to ensure that the internal investigation had captured the full extent of the problems the Board commissioned Ernst & Young to carry out a thorough independent review of accounting and reporting processes within Halo Foods. Their report concludes that the full extent of the issues were captured by the internal investigation and subsequent internal review processes. Furthermore, the report shows that these issues were uncovered promptly and there were no additional matters of concern. The operational problems within Halo Foods are discussed in more detail in the Chief Executive's Report but the problems uncovered relate to the trading period for Halo Foods between March and June 2009.  

In addition the external audit of the Group has been concluded and an unqualified report issued. The auditors have reported to the Audit Committee that there were no significant control issues identified throughout the Group. In spite of these processes the Board believes it is now appropriate to introduce a rolling internal audit process and this will commence during the current financial year.

Acquisition of Dormen Foods Limited

An amount of £3,250,000 in respect of deferred consideration was paid in October 2008. The final amount of deferred consideration of £1,250,000 was paid to the vendors of Dormen Foods in October 2009. 

Cash Flow

The cash generated from operating activities during the year was £7,738,000 (2008: £8,987,000). Working capital decreased during the year by £1,036,000 and is neutral over the last two years. This reflects another year of strong conversion of profits to cash. 

During the period under review the Group incurred £2,106,000 (2008: £1,614,000) of capital expenditure which included our new production facility in Park Royal for Savoury Snacks costing £763,000. We have concentrated our remaining investment programme on improving capacity and efficiency in our factories. The results of this targeted programme will benefit all our business units and give us confidence that Glisten is equipping itself for continued growth in the years ahead.

The Group generated free cash of £3,498,000 (2008: £2,355,000) which was used to fund deferred consideration of £3,400,000 (2008: £3,666,000). Net debt at 30 June 2009 at £25,228,000 (2008: £25,119,000) which represents gearing of 83% (2008: 89%). Gearing is arrived at by dividing net debt by net assets after adding back the cost of the financial liability and the deferred taxation thereon. Debt was better than anticipated due to improved receipt of cash in the latter part of June.

The Group paid the final outstanding deferred consideration payment of £1,250,000 to the vendors of Dormen Foods Limited at the end of October. Following this payment the Group has no further acquisition related payments outstanding and will apply all free cash generation to reducing debt.

Bank Facilities

The Group has agreed amended loan facilities of £32,000,000 with its lenders. Whilst the facility agreement has not been entered into it is intended to be in place over the next few weeks. These facilities, provided by Barclays Bank PLC are renewable on 31 December 2012 and are at variable rates which average 3.61% over LIBOR. £7,500,000 of this loan is repayable in quarterly instalments between March 2010 and December 2012 (existing facilities show repayments of £6,600,000 to June 2012). As part of agreeing bank facilities the Group has issued a warrant with a six year life over 5% of its issued ordinary share capital (circa 750,000 ordinary shares) at a warrant price of 12.5p. The cost incurred in relation to these loans is £640,000. The Group also has a commitment to issue two further tranches of warrants each of 2.5% (circa.375,000 ordinary shares) at 12.5p in February and May 2010 or pay two amounts of £450,000, one in February and one in May 2010.

At 30 June 2009 the Group had headroom of £5,522,000 (2008: £4,002,000) in its existing borrowing facilities of £30,500,000 (2008: £29,000,000) after taking account of its cash balances and finance leasing facilities. 

In September 2007 the Group entered into an interest hedge at rates between 4.25% and 6% against £23m of its borrowing until December 2010. At the same time, it entered into an interest hedge at rates between 4.47% and 6% with a minimum interest rate of 5.43% should base rate fall below 4.47% against £23m of its borrowing for the period from December 2010 until 2015 to be exercised at its lenders discretion at that time. 

We entered into these arrangements purely to bring stability to our financing costs. Given the fall in interest rates, these hedges have a fair value cost at 30 June 2009 of £4,373,000 (2008: £367,000) and this cost has been included under current liabilities. 

The current indicative cost of these interest hedges is now circa £2.7m and as part of concluding the amended bank facilities this interest hedge will be re-calibrated to LIBOR from base rate. These hedges are a non-cash provision and equate to discounted interest costs above the ruling base rates and the projection thereof at June 30 2009 for a period of six and one half years from the balance sheet date. These hedges replaced a previous hedge of £15m and under IAS 39 and are classed as derivatives. 

Robert Davies

Finance Director

CONSOLIDATED INCOME STATEMENT

YEAR ended 30 june 2009

Consolidated balance sheet

30 June 2009

Consolidated Statement of changes in shareholders' equity

Within the share premium account is an amount of £1,044,000 (2008: £1,044,000) of merger reserve.

NOTES TO THE FINANCIAL STATEMENTS

YEAR ended 30 june 2009

1.    BASIS OF PREPARATION

This preliminary financial information has been derived from financial statements which have been prepared in accordance with IFRS as adopted by the European Union, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. Those financial statements are presented on a going concern basis.  In forming their view on going concern the directors have considered the forecasts prepared for the next three years to 30 June 2012 and facilities available from the Group's bankers.  Amended terms and facilities have been agreed, subject to documentation, between the company and its bank.  The directors have received confirmation from the bank that the agreed terms will be documented and implemented in the near future and anticipate completion of this exercise by 30 November 2009.  Until implementation of the amended terms the directors have received confirmation that existing facilities remain in place and covenant testing has been deferred. 

Based on the forecasts reviewed and considering facilities currently available and amendments to be put in place, and after taking into consideration all relevant matters that should be taken into consideration, the directors have concluded that it is appropriate to present the financial statements on a going concern basis.

Exceptional items are those items which the directors consider should be separately disclosed in order to assist users in their understanding of the financial statements. Items included in the income statement under this heading are charges in respect of share based payment, impairment charges, unwinding of discounts in respect of deferred consideration, interest in respect of unwinding of finance costs, financing charges in respect of interest and currency charges and any other one off items outside the normal course of trading together with any taxation thereon.

2.   SEGMENTAL ANALYSIS

The directors consider that the Group's primary reporting segment is to be business segment. There is only one business segment and as such there is no requirement for a segmental analysis.

The Group's secondary reporting segment is geographic segments and these results are shown below. All assets are held in the UK .

3.       EXCEPTIONAL ITEMS

The directors consider that the above items do not form part of the underlying operating activities of the business and have shown them separately in order to aid the readers understanding of its performance. 

Administrative expenses include an amount of £68,000 in respect of the termination of an agency agreement and the remaining £218,000 is in respect of other restructuring people costs around the Group. 

During the prior year the company entered into a Yen denominated swap financing arrangement to lower the borrowing costs of the Group of certain borrowings. The above exchange loss (and associated tax movement) of £2,589k arose due to adverse currency movements in the year. The Group closed out its exposure in January 2008.

The Group holds an interest hedge over £23m of its debt. The marked to market fair value of this hedge at the year end was a liability of £4,373,000 (2008: £367,000) which gave rise to an adverse movement in market value of £4,006,000 which does not reflect the actual movements in the group's finance costs for the year.

The share option expense has been determined by using the Black-Scholes option-pricing model, the most widely used basis of share option fair values. This model requires the use of subjective assumptions, which can materially affect fair value estimates. The following assumptions were used to determine the fair value of employee share options:

Risk Free interest rates 4.68%

Expected volatility 20%

Expected lives of options 1-3yrs

A 10% fall out factor has been applied to the known remaining LTIP shares at the end of the year. This has resulted in a credit to the profit and loss account of £507,000 (2008: charge of £486,000) as a result of the reversal of previously charged amounts in respect of share options which are now not expected to vest. Volatility is arrived at by reference to the Group's share price movement over the last 3 years.

4.    FINANCE COSTS

5.    TAXATION

The taxation assessed for the year is different than the standard rate of corporation tax in the United Kingdom of 28% (2008: 28%). The differences are explained below.

6.    DIVIDENDS

7.    EARNINGS PER SHARE

Earnings per share is calculated on the basis of loss for the year of £675,000 (2008 profit: £3,866,000) divided by the weighted average number of shares in issue for the year to 30 June 2009 of 13,954,541 (2008: 13,945,960). The diluted earnings per share is calculated on the assumption all options vested were exercised, this would give rise to a total weighted average number of ordinary shares in issue of 14,318,279 (2008: 14,360,731). 

The directors consider that another measure for basic earnings per share is arrived at by using the profit for the financial year set out in the consolidated income statement under the column headed pre exceptional items of £2,499,000 (2008: £4,904,000) divided by the relevant weighted average number of shares. This is described as the adjusted earnings per share. It is this measure of earnings per share that the directors believe demonstrates the progress of the business. 

The directors also believe it is appropriate to measure the adjusted earnings per share after charging share based payment. The relevant profit numbers are £2,691,000 (£2,499,000; add £507,000 less the taxation effect thereon of £315,000), (2008: £4,554,000; £4,904,000 less £486,000 plus the taxation effect thereon of £136,000).

Share options granted to employees could potentially dilute basic earnings per share in the future, but as these have not yet vested they have not been included in the below calculations.

8.    PURCHASE OF SUBSIDIARY UNDERTAKINGS AND BUSINESSes

In the year an amount of £3,250,000 was paid to the vendors of Dormen Foods Limited. The final deferred consideration liability for the Group of £1,250,000 was paid in October 2009 to the vendors of Dormen Foods Limited. 

9.    analysis of changes in net debt

10.    DISTRIBUTION OF THE ANNUAL REPORT AND ACCOUNTS TO MEMBERS

The announcement set out above does not constitute a full financial statement of the Company and Group's affairs for the year ended 30 June 2009 or 2008. The Company's auditors have reported on the full accounts of the said years and have accompanied them with an unqualified report. The 2009 accounts have yet to be delivered to the Registrar of Companies.

The annual report and accounts will be posted to all shareholders of the Company, and will be available on our web site (www.glisten.plc.uk) and for inspection by the public at the registered office of the Company during normal business hours on any weekday. Further copies will be available on request from Glisten Plc, 6A, Harewood Yard, Harewood, Leeds, LS17 9LF.

The Company's annual general meeting will take place on 10 December 2009 at Eversheds, Bridgewater Place, Water Lane, Leeds, LS11 5DR, starting at 10.00am.  

RNS news service provided by Hemscott Group Limited.